RMS: Katrina Losses Initially Estimated at $1B-$2B

Risk Management Solutions (RMS), a provider of products and services for the management of catastrophe risk, said that insured losses from Hurricane Katrina’s first landfall in the U.S. are likely to range from $1 to $2 billion, based on current information on landfall location and wind speeds. Additional losses are expected from Katrina’s second landfall, which is forecast to occur on Monday, August 29.

Hurricane Katrina intensified to hurricane strength just before making landfall in the densely populated area of southeastern Florida. Katrina came on shore between Hallandale Beach and North Miami Beach, near the Miami-Dade- Broward county line at approximately 7 p.m. EDT, on Aug. 25. Maximum sustained wind speeds were estimated at 80 mph at landfall by the National Hurricane Center.

Category 1 storms have maximum sustained winds of 74 to 95 mph, which usually cause only minimal damage to structures, but can create concerns for flooding. However, significant flooding has not materialized despite Katrina’s relatively slow movement across the state. Localized total rainfall of up to 12-14 inches was experienced in southern Florida, with a wider swath of 8 inches across Miami-Dade. Counties further north received 5 inches or less. These are high, but not excessive amounts, and preparations were made in advance of the storm to lower water storage levels.

Katrina moved across southern Florida overnight, and emerged over the eastern Gulf of Mexico on Friday morning local time. The storm is forecast to turn up toward the northern Gulf of Mexico and head into northwest Florida. Conditions are favorable for significant intensification while the storm travels over the Gulf.

Depending on Katrina’s second landfall location and intensity, total insured losses from the storm could increase significantly.

Latest Comments

• August 30, 2005 at 7:10 am

  Adjuster says:

  Poe, you are the worst kind of carpetbagger. You espouse concern and empathy for policyholders when you are nothing but a get rich quick snake oil salesman. After the dust set... read more
• August 29, 2005 at 3:49 am

  Mr Obvious says:

  Poe, you dodged a big one. You might want to be quiet and pray you don't get hit by anything bigger than that overgrown thunderstorm that hit South Florida. Even then your hou... read more
• August 28, 2005 at 12:35 pm

  LL says:

  Poe: It is not a puzzle at all. There's a thing called 'the deductible'. Also, quite a lot of the losses are not covered because the insured decided not to pay for 'extras' li... read more